Organizational Structures That Support Strategic Initiatives CHAPTER 05 Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.

Organizational Structures That Support Strategic Initiatives

CHAPTER 05

Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

LEARNING OUTCOMES

1. Define the primary IT roles along with their associated responsibilities.

2. Explain the gap between IT and business professionals.

3. Explain why ethics and security are fundamental building blocks of business today.

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ORGANIZATIONAL STRUCTURES

• Organizational employees must work closely together to develop strategic initiatives that create competitive advantages

• Ethics and security are two fundamental building blocks that organizations must base their businesses upon

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IT ROLES AND RESPONSIBILITIES

• Information technology is a relatively new functional area, having only been around formally for around 40 years

• Recent IT-related strategic positions:– Chief Information Officer (CIO)– Chief Technology Officer (CTO)– Chief Security Officer (CSO)– Chief Privacy Officer (CPO)– Chief Knowledge Office (CKO)

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IT ROLES AND RESPONSIBILITIES

• Chief Information Officer (CIO) —Oversees all uses of IT and ensures the strategic alignment of IT with business goals and objectives.

• Broad CIO functions include:– Manager—Ensuring the delivery of all IT projects, on

time and within budget– Leader—Ensuring the strategic vision of IT is in line

with the strategic vision of the organization– Communicator—Building and maintaining strong

executive relationships

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IT ROLES AND RESPONSIBILITIES

• Chief Technology Officer (CTO)—Responsible for ensuring the throughput, speed, accuracy, availability, and reliability of IT

• Chief Security Officer (CSO)—Responsible for ensuring the security of IT systems

• Chief Privacy Officer (CPO)—Responsible for ensuring the ethical and legal use of information

• Chief Knowledge Office (CKO)—Responsible for collecting, maintaining, and distributing the organization’s knowledge

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IT ROLES AND RESPONSIBILITIES

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THE GAP BETWEEN BUSINESS PERSONNEL AND IT PERSONNEL

• Business personnel possess expertise in functional areas such as marketing, accounting, and sales

• IT personnel have the technological expertise

• This typically causes a communications gap between the business personnel and IT personnel

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IMPROVING COMMUNICATIONS

• Business personnel must seek to increase their understanding of IT

• IT personnel must seek to increase their understanding of the business

• It is the responsibility of the CIO to ensure effective communication between business personnel and IT personnel

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ORGANIZATIONAL FUNDAMENTALSETHICS AND SECURITY

• Ethics and security are two fundamental building blocks that organizations must base their businesses on to be successful

• Events like the Enron and Bernie Madoff scandals, along with 9/11, have shed new light on the meaning of ethics and security

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ETHICS

• Ethics—The principles and standards that guide our behavior toward other people

• Privacy—The right to be left alone when you want to be, to have control over your own personal possessions, and not to be observed without your consent

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ETHICS

• Issues affected by technology advances:– Intellectual Property– Copyright– Fair Use Doctrine– Pirated Software– Counterfeit Software

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SECURITY—HOW MUCH WILL DOWNTIME COST YOUR BUSINESS?

• A few questions companies should ask when determining the cost of downtime include:

– How many transactions can the company afford to lose without significantly impacting business?

– Does the company depend upon one or more mission-critical applications to conduct business?

– How much revenue will the company lose for every hour a critical application is unavailable?

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SECURITY—HOW MUCH WILL DOWNTIME COST YOUR BUSINESS?

• A few questions companies should ask when determining the cost of downtime include:

– What is the productivity cost associated with each hour of downtime?

– How will collaborative business processes with partners, suppliers, and customers be affected by an unexpected IT outage?

– What is the total cost of lost productivity and lost revenue during unplanned downtime?

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PROTECTING INTELLECTUAL ASSETS

• Organizational information is intellectual capital and must be protected

• Information Security—The protection of information from accidental or intentional misuse by persons inside or outside an organization

• Ebusiness automatically creates tremendous information security risks for organizations

• Most information security breaches result from people misusing an organization’s information either intentionally or inadvertently

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